Iran remained defiant Thursday as a U.N. deadline
arrived for it to halt uranium enrichment, and the
U.S. ambassador to the United Nations said unanimity
among the Security Council was not needed to take
action against Tehran.

Key European nations will meet with Iran in September
in a last-ditch effort to seek a negotiated solution
to the standoff over Tehran's refusal to freeze
uranium enrichment, a senior U.N. diplomat said
Thursday.

President Bush said "there must be consequences" for
Iran, adding that the war between Tehran-backed
Hezbollah militants and Israel demonstrated that "the
world now faces a grave threat from the radical regime
in Iran."

The U.N. nuclear watchdog, the International Atomic
Energy Agency, said in a report obtained by The
Associated Press that Iran shows no signs of freezing
enrichment, adding that Tehran started work on a new
batch Aug. 24.

The confidential IAEA report will be given to its
35-nation board. That is expected to trigger U.N.
Security Council members _ by mid- September _ to
begin considering economic or political sanctions.

Iranian President Mahmoud Ahmadinejad told a crowd of
thousands in the northwestern city of Orumiyeh that
"the Iranian nation will not accept for one moment any
bullying, invasion and violation of its rights."

He also said enemies of the country were trying to
stir up differences among the Iranian people, but "I
tell them: you are wrong. The Iranian nation is
united."

"They claim to be supporting freedom but they support
the most tyrannical governments in the world to pursue
their own interests," he said, referring to the United
States. "They talk about human rights while
maintaining the most notorious prisons. Those powers
that do not abide by God and follow evil are the main
source of all the current problems of mankind."

German Chancellor Angela Merkel said an Iranian
refusal to freeze uranium enrichment by the deadline
would be "very regrettable," and the international
community would be unable to ignore it.

"We have made Iran a very, very good offer," she
during a visit to the Baltic Sea port of Warnemuende,
alluding to a package of incentives aimed at
persuading Tehran to curb its nuclear activities.

If Iran does not accept, "we will not slam the door
shut, but we cannot act as if nothing had happened,"
Merkel said, adding that the next step would have to
be discussed, but gave no details.

The State Department has not said publicly what type
of punishment it might seek. But U.S. and European
officials have indicated they might push for travel
restrictions on Iranian officials or a ban on sale of
dual-use technology to Iran. The hope is to start with
relatively low- level punishments in a bid to attract
Russian and Chinese support, the officials have said.

More extreme sanctions could include a freeze on
Iranian assets or a broader trade ban _ although
opposition to that by Russia, China and perhaps others
would be strong, particularly since it could cut off
badly needed oil exports from Iran.

Russia and China, which have traditional economic and
strategic ties with Tehran, seem likely to resist
U.S.-led efforts for a quick response, which means
sanctions do not loom immediately. That has prompted
the Bush administration to consider rallying its
allies to impose sanctions or financial restrictions
of their own, independent of the Security Council.

Iranian Foreign Ministry spokesman Hamid Reza Asefi
shrugged off the possibility of sanctions, telling
state-run television that Iran "will find a way to
avoid pressure eventually."

The deadline was widely reported on the front pages of
major Iranian newspapers. The daily Aftab said the
showdown offers "the enemies" a chance to ratchet up
pressure on Iran. Another newspaper, Kargozaran,
expressed doubt that the U.S. would muster enough
support within the Security Council for punitive
sanctions.

It's not clear when exactly Thursday's deadline will
run out. The U.S. ambassador to the United Nations,
John Bolton, said he believed it would end at 12:01
a.m. Friday in Tehran _ or 3:31 p.m. Thursday at the
Security Council in New York.

But diplomats said the exact timing was not
particularly relevant for two reasons: They believe
Iran already has given its answer; and they would
almost certainly abandon their sanctions threat if
Iran decides to suspend enrichment after the deadline.

On Wednesday, Ahmadinejad urged European members of
the council against resorting to sanctions, saying
punishment would not dissuade his country. Another top
Iranian official urged Japan on Thursday to help
peacefully resolve the standoff without sanctions.

Abbas Araghchi, deputy minister for legal and
international affairs of the Iranian Foreign Ministry,
met with Japan's foreign minister in a clear sign of
Iran's continued efforts to lobby countries worldwide
against support for sanctions.

"We are confident of the peaceful nature of our
program. So if there is also goodwill and sincerity in
the other side, we are sure that we can reach a good
solution, a good conclusion through negotiations,"
Araghchi said.

Tehran insists it wants to enrich uranium as fuel
solely for civilian nuclear power stations. However,
the U.S. and other Western countries suspect it wants
to use it in nuclear warheads.

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